Chapter 3

1. Chapter 3

3. Meaning of Organization “An organization represents a group of people who work together for the achievement of common objective.” “An organization comes into existence when there are a number of persons in communication and relationship to each other and are willing to contribute towards a same goal.”

4. Edger H. Schein • An organization is the rational co-ordination of the activities of a number of people for the achievement of a common goal, through division of labour and function and through a hierarchy of authority and responsibility.

5. Organization defined as a process of: • Identifying and grouping the work to be performed • Defining and delegating responsibility and authority • Establishing relationships among the members.

6. Determine The Activities Group the activities Assign group Activities to Individuals Delegate authority and fix responsibilities Coordinate authority & responsibility RelationshipsProvide physical facilities & proper environment Steps in Forming an Organization

7. Determine The Activities • Understanding and formulation of objectives . • Understanding and formulation of goals of organization with nature of it. • Work done should be identified.

8. Group the activities • Determining the number and type of employees required • Recruitment • Promotion etc. • Departmentation: Dividing the whole concern into independent units and depts

9. Assign grouped activities to individuals: • Various activities to be performed are assigned to different employees according to their skills,experience,knowledge etc. Delegate authority and fix responsibilities: • Once departmention made ,next step to delegate powers to managers and fix responsibilities.

10. Coordinate authority and responsibilities • Establishing relationships with groups of enterprises. • Order->report->account Provide physical facilities and proper environment: • Machines,equipments,tools etc • Proper lightning, ventilation ,job security etc.

12. Types of organization • Line organization • Line and staff organization • Functional organization • Project type organization

13. Line organization • Line organization is the most oldest and simplest method of administrative organization • According to this type of organization, the authority flows from top to bottom in a concern. The line of command is carried out from top to bottom.

15. Features of Line Organization • most simplest form of organization • Line of authority flows from top to bottom. • Specialized and supportive services do not take place in these organization • independently take decisions in their areas and spheres. • always helps in bringing efficiency in communication and bringing stability to a concern.

16. It is also called as scalar organization. • It is the vertical type of organization structure. • Also called as military type because similar form of organization in the military. • Line organization is the oldest and simplest type of organization form. • It has a chain of authorities, one above the other.

17. Advantages

18. Functional Organization

19. Functional organization • It is also called as horizontal organization. •  There is grouping of activities as per functions. • Specialization of function is the characteristics of this type of organization. • Each group is performing a specific task.

21. Line and Staff Organization

22. It is combination of line and functional organization. It is horizontal and vertical both in structure. Organization will be successful only when there is joint work of managers and executers. This form of organization shows characteristics of line type at certain places and it is also functional one wherever it is desired

24. Merits of Line and Staff Organization • Relief to line of executives • Expert advice • Benefit of Specialization • Better co-ordination • Benefits of Research and Development- Training • Balanced decisions • Unity of action

25. Project organization In this structure, project members are chosen for their special capabilities in the light of the goals to be accomplished from different functional departments, viz., production, engineering, quality control, marketing research, and marketing.

27. Advantages • Fast Decision making • Manager has full control over team • Problem recognition is simple • Team has full control over resources

28. Disadvantages • Cost can be insufficient • Possibility of duplication on concurrent projects • Low level of knowledge transfer in the enterprise

29. Various forms of project organization: • Functional organization • Functional matrix • Balanced matrix • Project matrix • Project team.

30. Project oriented organization is one which: • Defines management by projects as an organizational strategy. • Adopts temporary organizations for the performance of complex processes. • Has a special project management culture.

31. DEPARTMENTATION Departmentation is a part of the organization process. It involves the grouping of common activities on the basis of a function of the organization under a single person’s control.

32. Departmentation refers to the classification of activities on operations of an undertaking into functionalized categories. It is created in product wise, process-wise or area wise. It ensures proper direction to and control on them.

33. Process of Departmentation Identification of Fixing the scope of Work authority and responsibility of the departmental heads Analysis of details Of each work Group the function Description of the and assign separate function of the person who has organization. Specialized in the respective group.

34. Advantages of Departmentation: 1. Organization structure 2. Flexibility 3. Specialization 4. Sharing of resources 5. Co-ordination 6. Control 7. Efficiency 8. Scope for growth and diversification 9. Responsibility

35. Principles of Departmentation Principle of attainment of organizational objectives According to this principle, the basis of departmentation must be such that there is greatest facility, in the most effective and efficient attainment of enterprise objectives. Principle of comprehensive departmentation Entire functions of the enterprise are to be covered while creating the departments.

36. Principle of inter-departmental co-operation Maximum inter-departmental co-operation is possible. Principle of promotion of specialization The process of department creation must promote both managerial and operational specialization so that maximum organizational efficiency is achieved; as a result of such specialization.

37. Principle of cost-benefit analysis The benefits obtained from creation of departments must exceed their operational costs; otherwise organizational profitability will be reduced. Principle of special attention to Key-Result Areas (KRA) KRA are those which vitally affect the long-term survival and growth of an enterprise. KRA may include profitability, market standing, public relations etc. as determined by the top management.

38.   Principle of flexibility flexible departmental set-up; Scope to change design of department as per requirements. Principle of human consideration The ideal basis of departmentation must not only rest on technical or financial considerations; it must give due weightage to human considerations i.e., needs, values, attitudes, expectations, feelings etc. of people working in the organization.